EXERCISES ON CHAPTER X.

1. A person insured his house and furniture in the sum of $5000, for five years, at 24 per cent. annually. What amount of premium did he pay? Ans. $562.50.

2. An invoice of foreign manufactured articles, amounting to $1300.87, is chargeable at the custom house with a duty of 20 per cent. What is the amount of duty to be paid? Ans. $260.174.

3. The tax on a certain landed estate amounts to $734.25. What is the estimated value of the estate, the tax being levied at å per cent.? Ans. $97900.

4. A broker's commission on a purchase of bank bills amounting to $1000, was $2.50. At what percentum was commission charged ? Ans. per cent. 5. An agent receives $3000 to purchase merchandise,—11 per cent. on the amount of purchase to be retained. What amount of purchase can the agent make? Ans. $2962.96'.

6. What nominal amount of stock in the capital of a road company, at 10 per cent. below par, could be bought for $1342.50? Ans. $1500.

7. A merchant bought 75 yards of cloth for $262.50. Its transportation cost $5.182, and the insurance on its transportation per cent. At what price per yd. must it be sold to clear 33 per cent.? Ans. $4.770'.

8. The property of a city amounting to $5000000, is to be taxed to the amount of $100000, for the purpose of constructing a railroad. At what percentum must the tax be laid? Ans. 2 per cent.

9. Bought a quantity of wheat for $700.621. Paid for transportation, and other charges on it $43.06; and sold it at a profit of 15 per cent.; what was the amount of profit made? Ans. $111.553.

10. A grocer bought coffee at $.10 per pound, and sold the same at $.12 per pound. What percentum of profit did he make on the coffee? Ans. 25 per cent.

11. A merchant sold a lot of cloth at $6.50 per yard, and thus realized a gain of 25 per cent. If the cloth had been sold at $5 per yard, what would have been his percentum of gain or loss? Ans. 31 per cent. loss.

12. Find the amount of stock in an insurance office, at 10 per cent. advance, that could be bought for $440, and the amount in a canal company, at 10 per cent. discount, that could be bought for $1000. Ans. $400; and $900. 13. A bought 200 head of cattle, for $1700. He sold to B one fourth of the number, at $13.25, and the remainder to C,

at $15.37 a head. What per centum of profit or loss did A realize on his cattle? Ans. Profit 74.632' per cent.

14. A commission merchant is to sell 12000 lb. of cotton, and invest the proceeds in sugar,-retaining 13 per cent. on the sale, and the same on the purchase. Cotton selling at 7 cts. and sugar at 5 cts., a lb., what quantity of sugar can the merchant buy? Ans. 16222.11' pounds. 15. On a stock of leather, sold at 183 per cent. profit, a merchant clears $237.50. At what cost was the leather bought? Ans. $1266.666'

16. A church which cost $20000, is insured at per cent., in such a sum, that, in case of its being destroyed by fire, the insurance company shall be liable for the cost of the building, and the premium of insurance. For what amount is the insurance taken? Ans. $20050.125'.

17. By selling a piece of damaged silk at $1.25 a yard, a merchant sustains a loss of 163 per cent. At what price was the silk purchased, and what was the amount of loss on 20 yards? Ans. $1.50; and $5.

18. A broker purchased for another $3000 of canal stock, ai an advance of 3 per cent.; and charged a commission of per cent. on the sum disbursed. What did the broker pay for the stock, and what is his commission?

Ans. $3090; and $23.175.

19. A commission merchant sold a lot of cloth for $200; at a profit to the owner of 20 per cent. If the cloth ha been sold for $175, what would have been the percentum of profit or loss to the owner, the commission in each case being 2 per cent.? Ans. Profit, 5 per cent.

20. Put into the hands of a broker $1000, in bank bills at a discount of 10 per cent. The broker was to purchase stock in the capital of a mining company, and have 14 per cent. on the nominal amount of the stock purchased. The stock is bought at 55 per cent. below par; what amount of brokerage do I have to pay? Ans. $25.

§ 265. INTEREST is the price or premium paid for the use of money, and is reckoned at a certain percentum, annually, on the sum for which it is paid.

Thus, if A lends B $500 at 6 per cent., for 3 years; at the end of that time, B must return the $500, and pay to A, as interest, $6 on each $100, for each of the 3 years.

The Principal is the sum for which Interest is paid-the Amount is the sum of the Principal and Interest.

What is the interest of $100, for one year, at 6 per cent.?

For 2

years? For 3 years? For 5 years? For 9 years?

What is the interest of $200, for one year at 7 per cent.? years? For 4 years? For 8 years? For 10 years? What is the amount of $100, for one year, at 6 per cent.? for 2 years? Of $300 for 3 years? Of $1000 for 4 years?

Legal Interest.

For 3

Of $200

§ 266. The legal rate of interest is the rate prescribed by law.

On debts in favor of the United States, interest is computed at 6 per cent.

In the individual States, the legal rate of interest is 6 per cent., with the exceptions that

In New York, South Carolina, Michigan, Wisconsin, and Iowa, it is 7 per cent.; in Georgia, Alabama, Mississippi, and Florida, it is 8 per cent.; in Texas, 10 per cent.; in Louisiana, 5 per cent., excepting that in the Louisiana banks it is 6 per

cent.

Usury.

$267. Usury is any rate of interest above the rate allowed by law. The taking of usury is prohibited by law, in the different States, under various penalties; such as a forfeiture of double the usury, a forfeiture of the usury and a part of the debt, &c.

In some of the States, the law sanctions a rate of interest higher than the prescribed legal rate, when the higher rate has been stipulated for between the debtor and creditor. The limit to such stipulated rate of interest is usually 10 or 12 per cent.; but in the State of Wisconsin the law sanctions any rate which may be agreed upon between the parties.

RULE LIII.

$288. To calculate INTEREST on any sum of money.

1. Multiply the Principal by the ratio of percentage; the product will be the interest for one year.

2. Interest for any number of years is found by multiplying one year's interest by that number.

3. Interest for MONTHS and DAYS may be found by taking proper parts of one year's interest,-in which case, reckon 12 months to a year, and 30 days to a month.

EXAMPLE.

Find the interest on $220.12 for 4y. 7 m. 10 da. at 6 per

cent.

The ratio of percentage is .06; (§ 245).

$220.125
.06

The int. for 6 m. is of 13.20750, the int. for one year.

Finding the interest for one year, is the same as finding 6 per cent. on the principal; (§ 249). The interest for 7 m. 10'da. is found by aliquot parts; (§ 208).

The several parts of the interest added together, make the whole interest.

By Compound Proportion. The question may be stated thus: If the interest on $100 for one year, be $6; what will be the interest on $220.124, for 4 years, 7 months, and 10 days? Hence, $100 $220.12

:

1y. 4y. 7 m. 10 da.:: $6· Interest required.

Note. In calculating interest for months and days, strict Iccuracy would require that the number of days in those months be taken, and 365 days allowed to a year. The method by the preceding Rule is commonly used, for convenience, though it allows but 360 days to a year.

EXERCISES.

1. A borrowed of B $500, at 6 per cent. interest, for 2 years 5 months, and 12 days. What did the interest amount to? Ans. $73.50. 2. C loaned to D $750.50, for 1 year, 8 months, and 20 days, at 7 per cent. interest. What did the interest amount to? Ans. $90.476'.

3. Borrowed of my neighbor $175.25, at 6 per cent. int est. What amount will I owe him, if the money be kept 3 y. 11m.? Ans. $216.433'.

4. Loaned to a friend $436.75, at 5 per cent. interest. What amount of money will discharge the debt, at the end of 1 y. 2 m. 15 da.? Ans. $463.136'.

5. An account with a merchant, amounting to $75.87, bore interest, at 6 per cent., for 2y. 4m. 10 da. What sum was then required to pay off the principal and interest?

Ans. $86.623'.

6. A farmer hired a laborer 12 months, for $125. Having deferred the payment of his wages for 3y. 1 m. 25 da., what amount should the farmer now pay, allowing interest at 6 per cent.? Ans. $148.645'.

7. Bought a plantation for $6000; of which one fourth is to be paid in hand, and the remainder in 2 y. 6 m., with interest at 8 per cent. What will be the amount of the remainder, at the expiration of the credit? Ans. $5400.

8. A person buys a house for $3600, to be paid in 3 equal instalments, in one, two, and three years, with interest at 6 per cent. from the time of purchase. What will be the entire amount of principal and interest? Ans. $4032.

9. A speculator borrowed $5000, which he immediately invested in land, and in 6 months sold the land for $7500, on a credit of 12 months, with interest from the time of sale. Money being at 6 per cent. interest, what is the speculator's gain or loss at the end of the 12 m.; at which time he pays the $5000? Ans. Gained $2500.

10. A planter consigned to a commission merchant 45000 lb. of cotton, which the latter sold at 9 cts. per .-commission per cent. The proceeds due the planter were not paid until the expiration of 1y. and 10 m.; what was the amount at that time, allowing interest at 7 per cent.? Ans. $4799.506'.